<PAGE> 1
UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, DC 20549
FORM 10-Q
---------
Quarterly Report pursuant to Section 13 or 15(d) of the Securities Exchange Act
of 1934.
For the Quarterly Period Ended June 30, 1997
Commission File No. 333-27665
CONTINENTAL GLOBAL GROUP, INC.
------------------------------
(Exact Name of Registrant as Specified in its Charter)
Delaware 31-1506889
-------- ----------
(State or other Jurisdiction of (I.R.S. Employer)
Incorporation or Organization) Identification No.)
438 Industrial Drive, Winfield, Alabama 35594
- --------------------------------------- -----
(Address of Principal Executive Offices) (Zip Code)
(205) 487-6492
--------------
(Registrant's Telephone Number, Including Area Code)
Indicate by check mark whether the registrant (1) has filed all reports required
to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during
the preceding the twelve months (or for such shorter period that the registrant
was required to file such reports), and (2) has been subject to such filing
requirements for the past 90 days.
Yes ( ) No ( x )
Indicate the number of shares outstanding of each of the issuer's classes of
common stock as of the latest practical date.
As of August 31, 1997, there were 100 shares of the registrant's common stock
outstanding.
<PAGE> 2
<TABLE>
<CAPTION>
INDEX
CONTINENTAL GLOBAL GROUP, INC.
Part I Financial Information PAGE NUMBER
-----------
<S> <C> <C>
Item 1 FINANCIAL STATEMENTS (UNAUDITED)...................................................1
--------------------------------
- Condensed Consolidated Balance Sheets
June 30, 1997 and December 31, 1996................................................2
- Condensed Consolidated Statements of Income
Three Months ended June 30, 1997 and 1996 and
Six Months ended June 30, 1997 and 1996............................................3
- Condensed Consolidated Statements of Cash Flows
Six Months ended June 30, 1997 and 1996............................................4
- Notes to Condensed Consolidated Financial Statements.............................5-8
- Independent Accountants' Review Report.............................................9
Item 2 MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL
-------------------------------------------------
CONDITION AND RESULTS OF OPERATIONS............................................10-13
-----------------------------------
Part II Other Information
Item 2 - CHANGE IN SECURITIES..............................................................14
--------------------
Item 6 - EXHIBITS AND REPORTS ON FORM 8-K..................................................14
--------------------------------
Signature....................................................................................15
</TABLE>
<PAGE> 3
Part I. Financial Information
Item I. Financial Statements (Unaudited)
1
<PAGE> 4
Continental Global Group, Inc.
Condensed Consolidated Balance Sheets
<TABLE>
<CAPTION>
JUNE 30, DECEMBER 31,
1997 1996
--------------------------------------
(Unaudited) (Note)
<S> <C> <C>
ASSETS
Current assets:
Cash and cash equivalents $ 26,717,355 $ 1,022,033
Accounts receivable, net 25,635,043 17,789,662
Inventories 25,549,801 20,536,315
Other current assets 1,319,261 1,097,211
--------------------------------------
Total current assets 79,221,460 40,445,221
Property, plant and equipment 19,026,689 9,844,508
Less accumulated depreciation 7,842,901 4,944,877
--------------------------------------
11,183,788 4,899,631
Goodwill 22,460,889 735,548
Other assets 5,451,354 418,484
--------------------------------------
$ 118,317,491 $ 46,498,884
======================================
LIABILITIES AND OWNER'S EQUITY
Current liabilities:
Note payable $ 2,736,074 $ 12,394,541
Trade accounts payable 13,696,868 10,942,282
Accrued compensation and employee benefits 2,859,933 3,927,214
Other accrued liabilities 9,537,444 3,098,074
Current maturities of long-term obligations 652,448 2,557,771
--------------------------------------
Total current liabilities 29,482,767 32,919,882
Senior notes 120,000,000
Other long-term obligations, less current maturities 5,658,271 11,585,314
Owner's equity:
Partner's capital 1,993,688
Stockholder's equity:
Common stock, no par value, authorized 1,500 shares,
issued and outstanding 100 shares at stated value of
$5 per share 500
Retained deficit (36,824,047)
--------------------------------------
(36,823,547) 1,993,688
--------------------------------------
$ 118,317,491 $ 46,498,884
======================================
</TABLE>
Note: The balance sheet at December 31, 1996 has been derived from the audited
financial statements at that date but does not include all the information and
footnotes required by generally accepted accounting principles for complete
financial statements.
See notes to condensed consolidated financial statements.
2
<PAGE> 5
Continental Global Group, Inc.
Condensed Consolidated Statements of Income
<TABLE>
<CAPTION>
THREE MONTHS ENDED JUNE 30 SIX MONTHS ENDED JUNE 30
1997 1996 1997 1996
------------------------------------ ------------------------------------
(Unaudited) (Unaudited)
<S> <C> <C> <C> <C>
Net sales $ 50,437,276 $ 33,708,726 $ 97,512,913 $ 73,734,317
Cost of products sold 40,280,760 26,539,872 78,774,351 58,822,305
--------------------------------------------------------------------------
Gross profit 10,156,516 7,168,854 18,738,562 14,912,012
Operating expenses:
Selling and engineering 3,144,642 2,642,441 6,397,859 4,907,627
General and
administrative 1,850,083 799,329 3,147,809 1,882,947
Management fee 327,026 796,690 1,102,992 1,646,001
--------------------------------------------------------------------------
Total operating expenses 5,321,751 4,238,460 10,648,660 8,436,575
--------------------------------------------------------------------------
Operating income 4,834,765 2,930,394 8,089,902 6,475,437
Other expenses:
Interest expense, net 3,194,850 670,290 4,472,087 1,455,415
Miscellaneous, net 445,691 92,052 499,010 193,178
--------------------------------------------------------------------------
Total other expenses 3,640,541 762,342 4,971,097 1,648,593
--------------------------------------------------------------------------
Income before
extraordinary item
and foreign income taxes 1,194,224 2,168,052 3,118,805 4,826,844
Foreign income taxes
(credit) 88,404 (161,596)
--------------------------------------------------------------------------
Income before
extraordinary item 1,105,820 2,168,052 3,280,401 4,826,844
Extraordinary item-gain on
extinguishment of debt 932,145
--------------------------------------------------------------------------
NET INCOME $ 1,105,820 $ 2,168,052 $ 3,280,401 $ 5,758,989
==========================================================================
</TABLE>
See notes to condensed consolidated financial statements.
3
<PAGE> 6
Continental Global Group, Inc.
Condensed Consolidated Statements of Cash Flows
<TABLE>
<CAPTION>
SIX MONTHS ENDED JUNE 30
1997 1996
-------------------------------------------
(Unaudited)
<S> <C> <C>
Income before extraordinary item $ 3,280,401 $ 4,826,844
Depreciation and amortization 1,423,250 514,319
Foreign income taxes (credit) (161,596)
Changes in operating assets and liabilities (4,161,334) 3,292,097
-------------------------------------------
Cash provided from operations 380,721 8,633,260
Investing activities:
Purchases of property, plant and equipment (881,687) (563,338)
Purchase of CC&E Pty, less cash acquired 20,153
Purchase of BCE, net of notes to seller (7,189,125)
Purchase of Hewitt-Robins, including acquisition costs (13,228,032)
-------------------------------------------
(21,298,844) (543,185)
Financing activities:
Proceeds from issuance of senior notes 120,000,000
Deferred financing costs (5,072,831)
Net decrease in borrowings on note payable (10,484,467) (4,475,521)
Principal payments on long-term obligations (13,218,366) (589,563)
Distributions for income taxes (1,683,591) (2,348,003)
Due to former shareholders of BCE (2,927,300)
Dividends paid (40,000,000)
-------------------------------------------
46,613,445 (7,413,087)
-------------------------------------------
INCREASE IN CASH $ 25,695,322 $ 676,988
===========================================
</TABLE>
See notes to condensed consolidated financial statements.
4
<PAGE> 7
Continental Global Group, Inc.
Notes to Condensed Consolidated Financial Statements (Unaudited)
June 30, 1997
A. BASIS OF PRESENTATION
The accompanying unaudited condensed consolidated financial statements have been
prepared in accordance with generally accepted accounting principles for interim
financial information and with the instructions to Form 10-Q and Article 10 of
Regulation S-X. Accordingly, they do not include all of the information and
footnotes required by generally accepted accounting principles for complete
financial statements. In the opinion of management, all adjustments (consisting
of normal recurring accruals) considered necessary for a fair presentation have
been included. Operating results for the three and six month periods ended June
30, 1997 are not necessarily indicative of the results that may be expected for
the year ending December 31, 1997. For further information, refer to the
consolidated financial statements and footnotes of Continental Global Group,
Inc. and subsidiaries for the year ended December 31, 1996 included in the Form
S-4 Registration Statement (Registration No. 333-27665) filed by the Company on
July 31, 1997.
B. INVENTORIES
Inventories, which consist of raw materials, manufactured and purchased parts,
and work in process are stated at the lower of cost or market. Since inventory
records are maintained on a job order basis, it is not practical to segregate
inventories into their major classes. The cost for approximately 82% and 88% of
inventories at June 30, 1997 and December 31, 1996, respectively, is determined
using the last-in, first-out ("LIFO") method with the remainder determined using
the first-in, first-out ("FIFO") method. Had the FIFO method of inventory (which
approximates replacement cost) been used to cost all inventories, inventories
would have increased by approximately $2,250,000 and $2,220,000 at June 30, 1997
and December 31, 1996, respectively.
5
<PAGE> 8
Continental Global Group, Inc.
Notes to Condensed Consolidated Financial Statements (Unaudited)-
Continued
C. ACQUISITIONS AND DEBT ISSUANCE
On January 7, 1997, the Company purchased the assets of BCE Holding Company Pty.
Ltd. in Australia (BCE), a major manufacturer and supplier of conveyor equipment
with net sales in 1996 of $32.6 million. The purchase price was $11,946,000. In
addition, the Company contributed $3,512,000 in capital to BCE after the
acquisition. Financing consisted of an advance on the revolving credit line of
approximately $6,800,000, an addition to the existing term loan of approximately
$4,500,000, and approximately $4,800,000 in seller financing. The transaction
was accounted for as a purchase. The table below reflects the current value of
the net assets acquired of BCE:
<TABLE>
<S> <C>
Accounts receivable $ 7,698,000
Inventory 2,078,000
Property, plant and equipment 5,832,000
Goodwill 9,635,000
Other assets 385,000
Accounts payable (5,954,000)
Other liabilities (7,099,000)
Notes payable (629,000)
--------------------
ACQUISITION COST $ 11,946,000
====================
</TABLE>
Summarized results of operations for BCE for the six months ended June 30, 1997
are as follows:
<TABLE>
<S> <C>
Net sales $ 15,414,000
Cost of products sold 13,001,000
--------------------
Gross profit 2,413,000
Operating costs 2,525,000
--------------------
Operating loss (112,000)
Interest expense 319,000
Miscellaneous income, net (17,000)
--------------------
Loss before income taxes (414,000)
Foreign income tax credit 162,000
--------------------
NET LOSS $ (252,000)
====================
</TABLE>
6
<PAGE> 9
Continental Global Group, Inc.
Notes to Condensed Consolidated Financial Statements (Unaudited)-
Continued
C. ACQUISITIONS AND DEBT ISSUANCE--CONTINUED
On April 1, 1997, the Company acquired substantially all of the assets of the
Hewitt-Robins Conveyor Components Division of W.S. Tyler, Incorporated, a
manufacturer of idlers ("Hewitt-Robins"). The purchase price for Hewitt-Robins
was approximately $13,228,000 in cash plus assumption of approximately
$1,100,000 million of liabilities. The purchase price includes $12,600,000 of
goodwill. The results of operations since the date of acquisition have been
included in the consolidated financial statements and are not material.
On April 1, 1997, the Company issued $120 million in Series A Notes due 2007.
Interest on the notes is payable semi-annually in cash in arrears. The Senior
Notes are redeemable at the option of the Company, in whole or in part, any time
on or after 2002 subject to certain call premiums. The Senior Notes are
guaranteed by the domestic subsidiaries of the Company and contain various
restrictive covenants that, among other things, place limitations on the sale of
assets, payment of dividends, incurring additional indebtedness and restrict
transactions with affiliates. The proceeds of the Notes were utilized as
follows:
<TABLE>
<S> <C>
Gross proceeds of Series A Notes $ 120,000,000
Dividend to stockholder (40,000,000)
Repayment of note payable (18,876,684)
Repayment of term loan (16,459,711)
Repayment of subordinated notes (650,000)
Acquisition of Hewitt-Robins (13,228,000)
Fees (5,073,000)
--------------------
EXCESS CASH FROM PROCEEDS $ 25,712,605
====================
</TABLE>
D. INCOME TAXES
The Company's United States operations are not subject to income tax as separate
entities. The Company's United States income is included in the income tax
returns of the stockholder. The Company's Australian subsidiary is subject to
Australian income taxes. For the six months ended June 30, 1997, a foreign
income tax benefit was recorded of $162,000 due to a net operating loss of
$414,000.
7
<PAGE> 10
Continental Global Group, Inc.
Notes to Condensed Consolidated Financial Statements (Unaudited)-
Continued
E. SUBSEQUENT EVENT
Pursuant to a Prospectus dated July 31, 1997, the Company made an offer to
exchange the 11% Series B Senior Notes due 2007 ("Series B Notes") for the $120
million of the Series A Notes. All of the Series B Notes were exchanged for the
Series A Notes on September 3, 1997. The form and terms of the Series B Notes
are the same as the form and terms of the Series A Notes, except that the
Series B Notes have been registered under the Securities Act of 1933, as
amended.
8
<PAGE> 11
Independent Accountants' Review Report
Stockholder and Board of Directors
Continental Global Group, Inc.
We have reviewed the accompanying condensed consolidated balance sheet of
Continental Global Group, Inc. and subsidiaries as of June 30, 1997 and the
related condensed consolidated statements of income for the three-month and
six-month periods ended June 30, 1997 and 1996, and the condensed consolidated
statements of cash flows for the six-month periods ended June 30, 1997 and 1996.
These financial statements are the responsibility of the Company's management.
We conducted our reviews in accordance with standards established by the
American Institute of Certified Public Accountants. A review of interim
financial information consists principally of applying analytical procedures to
financial data, and making inquiries of persons responsible for financial and
accounting matters. It is substantially less in scope than an audit conducted in
accordance with generally accepted auditing standards, which will be performed
for the full year with the objective of expressing an opinion regarding the
financial statements taken as a whole. Accordingly, we do not express such an
opinion.
Based on our reviews, we are not aware of any material modifications that should
be made to the accompanying condensed consolidated financial statements referred
to above for them to be in conformity with generally accepted accounting
principles.
We have previously audited, in accordance with generally accepted auditing
standards, the consolidated balance sheet of Continental Global Group, Inc. and
subsidiaries as of December 31, 1996, and the related consolidated statements of
income, owner's equity, and cash flows for the year then ended not presented
herein and in our report dated March 7, 1997, we expressed an unqualified
opinion on those consolidated financial statements. In our opinion, the
information set forth in the accompanying condensed consolidated balance sheet
as of December 31, 1996, is fairly stated, in all material respects, in relation
to the consolidated balance sheet from which it has been derived.
/s/ Ernst & Young LLP
Cleveland, Ohio
September 9, 1997
9
<PAGE> 12
ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND
RESULTS OF OPERATIONS
The following discussion should be read in conjunction with the Consolidated
Financial Statements and related notes included in the Company's Form S-4
Registration Number 333-27665, dated July 31, 1997, relating to the exchange of
the Company's Series B Senior Notes for Series A Senior Notes.
GENERAL
- -------
The Company believes it is a leading international manufacturer and supplier of
Conveyor Equipment for use in the coal mining industry. The Company estimates it
has 40% share of the United States market for idlers used in above ground
Conveyor Equipment and a significantly higher share of the United States
underground coal mining Conveyor Equipment market. In January 1997 the Company
consummated the acquisition of BCE, a group of Conveyor Equipment companies in
Australia, and on April 1, 1997, the Company consummated the acquisition of
Hewitt-Robins, a United States manufacturer of Conveyor Components.
RESULTS OF OPERATIONS
- ---------------------
Three months ended June 30, 1997, compared to three months ended June 30, 1996:
NET SALES
- ---------
Net sales increased $16.7 million, or 49.6% from $33.7 million in 1996 to $50.4
million in 1997. This increase was due to higher sales as a result of increased
volumes in the Company's Mining Equipment and Components business of $8.3
million, decreases in Engineered Systems and Mobile Homes business of $1.7
million, and increased sales resulting from the BCE and Hewitt-Robins
acquisitions of $6.9 million and $3.2 million, respectively.
GROSS PROFIT
- ------------
Gross profit increased $3.0, or 41.7%, from $7.2 million in 1996 to $10.2
million in 1997 as a result of the BCE acquisition of $1.3 million, $1.1 million
from the Hewitt-Robins acquisition and $.7 million from the balance of the
Company's businesses.
OPERATING EXPENSES
- ------------------
Selling, General, and Administrative expenses, not including management fees,
("SGA Expenses") increased $1.6 million or 45.1% from $3.4 million in 1996 to
$5.0 million in
10
<PAGE> 13
1997. The increase in these expenses are $.9 million for BCE, $.3 million for
Hewitt- Robins and $.4 million from the Company's other businesses. The General
and Administrative expenses increased from $.8 million in 1996 to $1.9 million
in 1997. The increases are $.7 million due to the BCE acquisition, $.1 million
due to the Hewitt-Robins acquisition, $.1 for Continental Global (parent
company), and $.2 million from other business. The management fee decreased from
1996 by $.5 million due to a new agreement that fixed the level upon which fees
are based.
OPERATING INCOME
- ----------------
Operating income increased $1.9 million or 65.0% from $2.9 million in 1996 to
$4.8 million in 1997 due to BCE acquisition of $.3 million, $.8 million from the
Hewitt-Robins acquisition, $.3 million from the Company's other businesses, and
a decrease in management fee of $.5 million.
RESULTS OF OPERATION
- --------------------
Six months ended June 30, 1997, compared to the six months ended June 30, 1996:
NET SALES
- ---------
Net sales were $97.5 million for the six months ended June 30, 1997, an increase
of $23.8 million, or 32.2%, from $73.7 million in 1996 to $97.5 million in 1997.
This increase was due to higher sales as a result of increased volumes in the
Company's Mining Equipment and Components business of $12.0 million, decreases
in Engineered Systems and Mobile Homes business of $4.6 million, and increased
sales resulting from the BCE and Hewitt- Robins acquisitions of $13.2 million
and $3.2 million, respectively.
GROSS PROFIT
- ------------
Gross profit increased $3.8 million, or 25.7%, from $14.9 million in 1996 to
$18.7 million in 1997 due to the BCE acquisition for $1.9 million, the
Hewitt-Robins acquisition for $1.1 million, a $1.8 million increase from the
Mining Equipment and Component business, and a decrease in Engineered Systems
and Mobile Homes business of $1.0 million.
OPERATING EXPENSES
- ------------------
SGA Expenses not including management fees, increased $2.7 million or 40.5% from
$6.8 million in 1996 to $9.5 million in 1997. This increase results from SGA
Expenses of $2.1 million for BCE acquisition and $.3 million for Hewitt-Robins
acquisition and $.3 million from the other Company's subsidiaries. The
management fees decreased from 1996 by $.5 million due to a new agreement that
fixed the level upon which management fees are based.
11
<PAGE> 14
OPERATING INCOME
- ----------------
Operating income increased $1.6 million, or 24.9%, from $6.5 million in 1996 to
$8.1 million in 1997 due to the increase in gross profit of $3.8 million,
partially offset by the increase of $2.7 million in SGA Expenses and a decrease
in management fee of $.5 million.
EXTRAORDINARY ITEMS
- -------------------
The extraordinary gain of $.9 million in 1996 resulted from the early
extinguishment of a subordinated promissory note with a carrying value of $1.4
million.
BACKLOG
- -------
Backlog at June 30, 1997 increased $27.9 million, or 97.2%, from $28.7 million
in 1996 to $56.6 million in 1997. The increase in backlog is due primarily to
the BCE acquisition for $24.6 million and $3.1 million for the Hewitt-Robins
acquisition. Approximately 80% of the backlog is expected to be shipped in 1997.
LIQUIDITY AND CAPITAL RESOURCES
- -------------------------------
Net cash provided by operations for the six months ending June 30, 1997 and 1996
was $.4 million and $8.6 million, respectively. Net cash provided in 1997 was
negatively impacted by an increase of $4.1 million of net operating assets. Net
cash provided in 1996 was favorably impacted by a reduction of $3.3 million in
net operating assets. The difference of $7.4 million in operating assets and
liabilities between the two periods was a result of acquisitions of BCE and
Hewitt-Robins and increased business volume.
Net cash used in investing activities for the six months ending June 30, 1997
and 1996 was $21.3 million and $.5 million, respectively. The expenditures in
1997 represented primarily the acquisition of BCE for $7.2 million and
Hewitt-Robins for $13.2 million. The balance of expenditures, $.9 million for
1997 and $.5 million for 1996 represented the purchase of property, plant and
equipment.
Net cash provided by (used in) financing activities for the six months ending
June 30, 1997 and 1996 was $46.6 million and $(7.4) million, respectively. Cash
provided by financing activities in 1997 was due primarily to the issuance of
$120.0 million of Senior Notes. At the time of the offering, the Company made a
distribution of $40.0 million to its sole shareholder and paid financing fees of
$5.1 million. In 1997, borrowings were reduced on notes payable of $10.5 million
and long term obligations of $13.2 million. In connection with the BCE
acquisition in 1997, $2.9 million was paid to former shareholders of BCE. Net
cash used for financing in 1996 consisted primarily of the repayment of notes
payable and retirement of long term obligations.
Distribution for income taxes of $1.7 million in 1997 and $2.3 million in 1996
were made.
12
<PAGE> 15
Current financial resources (working capital) and anticipated funds from
continuing operations are expected to be adequate to meet current cash
requirements. The Company's recent growth was primarily the result of
acquisitions. In the event the Company has an opportunity to make additional
acquisitions, adequate resources are available. At June 30, 1997, the Company
had cash and cash equivalent of $26.7 million and an unused credit facility line
of $30.0 million.
13
<PAGE> 16
PART II
OTHER INFORMATION
- --------------------------------------------------------------------------------
ITEM 2. CHANGES IN SECURITIES
---------------------
During the three month period ended June 30, 1997, the registrant on
April 1, 1997, sold for cash $120,000,000 of 11% Series A Senior Notes
due April 1, 2007. The initial purchaser of the Senior Notes was
Donaldson, Lufkin & Jenrette Securities Corporation. The aggregate
offering price was $120,000,000 with aggregate discounts and commission
of $3,600,000. Exemption from registration was under Section 4(2) of
the Securities Act of 1933.
The Company filed with the Securities and Exchange Commission on July
31, 1997, an Offer to Exchange Series B Senior Notes for Series A
Senior Notes. Pursuant to such Offer all of the Series B Senior Notes
were exchanged for Series A Senior Notes on September 3, 1997.
ITEM 6. EXHIBITS AND REPORTS ON FORM 8-K
--------------------------------
(a) Exhibits - See index of exhibits
(b) No reports on Form 8-K were filed during the quarter ended June
30, 1997
14
<PAGE> 17
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, the
Registrant has duly caused this report to be signed on its behalf by the
undersigned thereunto duly authorized.
CONTINENTAL GLOBAL GROUP, INC.
/s/ JIMMY L. DICKINSON
-----------------------------------
JIMMY L. DICKINSON
Vice President and Chief Financial
Officer (As duly authorized
representative and as Principal
Financial and Accounting Officer)
Date: September 15, 1997
15
<PAGE> 18
CONTINENTAL GLOBAL GROUP, INC.
FORM 10-Q
INDEX OF EXHIBITS
<TABLE>
<CAPTION>
EXHIBIT
NUMBER DESCRIPTION OF EXHIBIT
------ ----------------------
<S> <C> <C>
3.1 Certificate of Incorporation of Continental Global Group, Inc.,
as currently in effect *
3.2 By-Laws of Continental Global Group, Inc., as currently in effect *
4.1 Indenture, dated as of April 1, 1997, among Continental Global Group,
Inc., Continental Conveyor & Equipment Company, Goodman Conveyor
Company, and the Trustee (containing, as exhibits, specimens of the
Series A Notes and the Series B Notes) *
4.2 Purchase Agreement, dated as of March 26, 1997, among Continental
Global Group, Inc., Continental Conveyor & Equipment Company,
Goodman Conveyor Company, and Donaldson, Lufkin & Jenrette
Securities Corporation, as Initial Purchaser, relating to the Series A Notes *
4.3 Registration Rights Agreement, dated as of April 1, 1997, among
Continental Global Group, Inc., Continental Conveyor & Equipment
Company, Goodman Conveyor Company, and Donaldson, Lufkin &
Jenrette Securities Corporation, as Initial Purchaser *
10.1 Revolving Credit Facility, dated as of September 14, 1992, as amended
by Amendment I, II, and III, among Continental Conveyor & Equipment
Company, Goodman Conveyor Company, and Bank One, Cleveland, NA *
10.2 Share Sale Agreement, dated as of November 8, 1996, as amended by
First and Second Supplementary Deeds, among Continental Pty. Ltd.
and various Australian sellers, relating to the BCE Acquisition *
10.3 Asset Purchase Agreement, dated as of March 3, 1997, among Continental
Conveyor & Equipment Company, Process Technology Holdings, Inc., and
W. S. Tyler Incorporated, relating to the Hewitt-Robins Acquisition *
10.4 Management Agreement, dated as of April 1, 1997, between Continental
Global Group, Inc. and Nesco, Inc. *
10.5 Tax Payment Agreement, dated as of April 1, 1997, among Continental
Global Group, Inc., Continental Conveyor & Equipment Company,
Goodman Conveyor Company, and NES Group, Inc. *
12 Statement regarding computation of ratio of earnings to fixed charges
27 Financial Data Schedule (filed electronically only)
</TABLE>
*Incorporated by reference from Form S-4 Registration Number 333-27665 filed
under the Securities Act of 1933, as amended
<PAGE> 1
EXHIBIT 12
CONTINENTAL GLOBAL GROUP, INC.
COMPUTATION OF RATIO OF EARNINGS TO FIXED CHARGES
(IN THOUSANDS, EXCEPT FOR RATIOS)
================================================================================
<TABLE>
<CAPTION>
THREE MONTHS SIX MONTHS
ENDING JUNE 30 ENDING JUNE 30
1997 1996 1997 1996
------------------------------- ----------------------------
<S> <C> <C> <C> <C>
COMPUTATION OF EARNINGS:
Income before extraordinary
item and foreign income taxes 1,194 2,168 3,119 4,827
Add:
Interest expense 3,195 670 4,472 1,455
Amortization of deferred
financing cost 125 7 132 13
Portion of rent expense representative
of an interest factor 114 101 226 200
----------------------------------------------------------------
EARNINGS 4,628 2,946 7,949 6,495
================================================================
COMPUTATION OF FIXED CHARGES:
Interest expense 3,195 670 4,472 1,455
Amortization of deferred
financing cost 125 7 132 13
Portion of rent expense representative
of an interest factor 114 101 226 200
----------------------------------------------------------------
FIXED CHARGES 3,434 778 4,830 1,668
================================================================
RATIO OF EARNINGS TO FIXED CHARGES 1.35 3.79 1.65 3.89
================================================================
</TABLE>
<TABLE> <S> <C>
<ARTICLE> 5
<LEGEND>
THIS SCHEDULE CONTAINS SUMMARY FINANCIAL INFORMATION EXTRACTED FROM THE
FINANCIAL STATEMENTS LISTED ON PAGES 2 AND 3 OF THIS FORM 10-Q AND IS QUALIFIED
IN ITS ENTIRETY BY REFERENCE TO SUCH FINANCIAL STATEMENTS.
</LEGEND>
<CIK> 0001039785
<NAME> CONTINENTAL GLOBAL GROUP, INC.
<MULTIPLIER> 1,000
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0
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